Fresh & Easy Buzz: May 2010

Sunday, May 30, 2010

Lend A Hand: One Way to Remember and Honor Those Who Served on Memorial Day

Memorial Day, originally called Decoration Day, is a day of remembrance for those who have died in our nation's service.

Honoring those who have died serving couldn't be more important than it is this Memorial Day. American men and women are fighting in two wars, in Iraq and Afghanistan. Since September 11, 2001, more than 5,000 Americans have lost their lives in the two wars, and tens of thousands more have returned home wounded.

For those who serve, nine years of war on two fronts has taken its toll on many of these service men and woman, particularly those wounded warriors and their families.

One way to honor those who gave their lives in our nation's service is to do what we can to assist those groups and individuals serving members of the military and honoring the memories of veterans past. We've chosen on this Memorial Day to highlight three groups doing just that.

Operation Homefront

Operation Homefront, a non-profit organization dedicated to helping America's service men and women of the Iraq and Afghanistan wars, exists as a lifeline to returning soldiers and their families, especially those who return wounded.

As you celebrate Memorial Day, one simple way you can help these wounded warriors and their families is by making a donation to Operation Rescue. Fresh & Easy Buzz can tell you any amount of money you donate will be put to use directly helping the service men and women who need assistance, along with their families. It's important to remember that when a family-member serves in war, his or her family also is serving in a real and meaningful way.

You can view Operation Homefront's website here. On the site is a listing of immediate needs the group can use financial help with, along with information on how to make a general donation to the cause. There's also information about how businesses and individuals can hold fundraising events for Operation Homefront, along with information on how you can volunteer with the organization that provides a real and material lifeline to America's wounded warriors.

A National World War I Memorial: Frank Buckles' Last Battle

In 1917 Frank Buckles (above), America's last living veteran of World War I, enlisted in the United States Army, telling the recruitment officer he wanted to be sent to France to fight on the front lines.

At 109-years old, Frank Buckles has launched what likely will be his last battle: He's joined The World War I Memorial Foundation as its spokesman.

In March 2008, Mr. Buckles visited the District of Columbia War Memorial on the National Mall in Washington DC. There he saw a peaceful, secluded memorial, which was dedicated in 1931 to honor the 499 residents of the District of Columbia who gave their lives in World War I, in a state of neglect and extreme disrepair.

While visiting the memorial he also recalled that there is no national memorial to World War I. As a result, Frank Buckles' is leading the charge - his last battle - for the restoration and re-dedication of the D.C. memorial as a National and District of Columbia World War I Memorial.

There are national memorials for World War II veterans - the World War II National Memorial dedicated just a few years ago - for veterans of the Vietnam War - The National Vietnam Veterans Memorial, which opened in 1982 - and Korean War veterans - but a similar national monument for World War I veterans doesn't exist.

In 2014 the world will mark the centennial of World War I, also called the "Great War." Nearly 5 million Americans served in World War I, and 116,516 Americans died overseas. the "Great War" marked the first time in U.S. history that American soldiers went abroad to defend foreign soil against aggression. World War I also ushered in what historians call the American century.

The World War I Memorial Foundation was formed to make Frank Buckles' dream a reality. The mission of the Foundation is to advocate and raise funds for the re-dedication of the DC War Memorial as a national World War I memorial, dedicated to all those Americans who served in the "Great War."

All of the veterans of World War I have left us, accept for Frank Buckles. That fact makes it even more important we help the foundation to achieve its goal of creating the World War I National Memorial. We owe it to those veterans of the "Great War," their families, ourselves as Americans, and to history.

The World War I Memorial Foundation needs donations for the restoration project. Please go to the website here and help. Donations can be made online. There's also an online petition at the site. The group asks you to sign it in support of the memorial.

Additionally, the foundation needs people to write their Members of Congress and Senators, asking them to support S. 2097, the Frank Buckles World War I Memorial Act. [More information here.]

[Suggested reading: Richard Rubin, who is writing a book about the last American veterans of World War I, has an essay about Frank Buckles in today's Parade magazine here. Photo credit: Frank Buckles, 109 years old, at the WWI monument for D.C. residents, by David DeJonge.]

Bugles Across America

If you've attended a funeral memorial service for a veteran of the United States Military in the last ten years and there was a uniformed military bugler playing taps at the service, the bugler's being there is most likely thanks to the organization Bugles Across America.

In 2000, Marine Corps veteran and bugler Tom Day (pictured above playing his bugle at a memorial service) was watching the news on his television at home. He saw a report in which a Pentagon official was talking about the then new law the U.S. Congress had passed. That legislation, passed in 2000 and signed by President Bill Clinton, gave every veteran the right to have at least two uniformed military people to fold the flag and play taps on a CD player at his or her memorial service. Asked in the news piece by the television reporter why taps was to be played on a CD player rather than by a live bugler, the Pentagon Official said it was because there's a shortage of buglers out there in America. A true statement then and now. Sitting in front of his television that evening Tom Day said: "I'll get them for you."

And he is. In 2000, Tom Day started Bugles Across America, which provides a live bugler for any U.S. veteran who requests one at his or her funeral memorial service.

"Bugles Across America was begun to take this a step further, and in recognition of the service these veterans provided their country," Tom Day says. "We felt that every veteran deserved a live rendition of taps played by a live bugler. To this end, we are actively seeking volunteers to provide this valuable service to veterans and their families."

Bugles Across America now has over 5000 bugler-volunteers located in all 50 U.S. states - and can use even more, according to Tom Day.

Bugles Across America could also use financial assistance in the form of donations of any size. He doesn't like to talk about it but when pressed Day says he has been spending about $10,000 annually out of his own pocket to support the organization he founded. And it's something he's willing to continue doing as long as his bank account holds out.

He shouldn't have to though - should he?

It may seem like a little thing, having a live bugler play taps at the memorial service of a veteran, but sometimes those little touches are what matter most. If you agree, like we do, you can make a donation in any amount to Bugles Across America at its website here.

And if you can play (or know a person who can) a bugle - or a trumpet, cornet, or flugelhorn - Tom Day wants to know. (See the website.) The bugler can be of any age as long as they can play the 24 notes of Taps with an ease and style that will do honor to both the Veterans, their families, and the burial detail performing the service, says Day.

Happy Memorial Day.

We hope our readers will join us and millions of others at 3 p.m. on Memorial Day, May 31, by taking a one minute moment of remembrance.

The National Moment of Remembrance, established by Congress, asks Americans wherever they are at 3 p.m.on Memorial Day to pause in a one minute act of national unity. The time 3 p.m. was chosen because it is the time when most Americans are enjoying their freedoms on the national holiday. The Moment does not replace traditional Memorial Day events; rather it is an act of national unity in which all Americans, alone or with family and friends, honor those who died for our freedom. It will help to reclaim Memorial Day as the sacred and noble holiday it was meant to be. In this shared remembrance, we connect as Americans. [More information here. Videos for moment of silence on Memorial Day]

Saturday, May 29, 2010

Going Rural: Fresh & Easy Neighborhood Market to Build First Store in Los Banos, California

Northern California Special Report: Central Valley

Tesco's Fresh & Easy Neighborhood Market plans to build a 13,969 square-foot store in Los Banos, California, a rural city of 36,198 located in California's Central Valley. The store will be Tesco's first Fresh & Easy unit in the city, which is in Merced County. It will also be the grocer's first store in Merced County.

Los Banos is considered part of Northern California, although it's right on the border-line. Cities south of Los Banos, like Fresno, are more properly referred to as being in Central California.

The City of Los Banos Planning Commission approved Fresh & Easy's site plan for the store on Wednesday, May 26. The commission also approved the use of an off-sale wine and beer sales license, which Fresh & Easy has applied for with the State of California, for the location.

The site plan approval is based on a set of design and other related conditions [see here] that Fresh & Easy Neighborhood Market and its store designers and building contractors must follow. The approval also expires in one year if Fresh & Easy doesn't obtain a building permit in that time period, although there is an option to extend the approval for an additional year.

According to the city's planning department staff, neither Tesco's Fresh & Easy or its representatives have said when construction of the store would begin. Fresh & Easy Buzz would be surprised is the grocer breaks ground on the site this year.

The Los Banos City Council must grant final approval of the site plan. There wasn't any organized opposition against the store voiced at Wednesday's planning commission meeting. Therefore it's likely the Los Banos City Council will follow the planning commission's lead and grant final approval.

The future Fresh & Easy store will be in an existing shopping center, The Los Banos Marketplace, at 1420 E. Pacheco Boulevard. The center's major tenants include Walgreens, Starbucks, Quiznos and Jack in the Box.

There's a vacant building on the 1.22 acre site earmarked for the Fresh & Easy market. According to the planning commission documents, the grocer plans to demolish the building and build the 13,969 store from the ground up. Tesco's Fresh & Easy Neighborhood Market has purchased the 1.22 acre parcel.

The city of Los Banos has a community design standards ordinance for the part of the city where the Fresh & Easy store is planned. Keeping with the city's history and culture (agrarian) and heritage (Spanish), the design standards are of a Spanish-Mission style. The Fresh & Easy store's architects have followed these community design standards, according to the city's planning department staff.

Among the local (Spanish-Mission style) design characteristics and features of the Fresh & Easy store are: a tiled roof, arched entry doors and window openings, arcaded porches, a walled garden, towers and accentuated corner parapet elements, varied roof heights, and ornamental brick to enhance the Spanish-Mission architecture motif. [Tesco's Fresh & Easy Neighborhood Market went through a lengthly hearing process in 2008 regarding a proposed store in Sacramento's Oak Park neighborhood, which the grocer to date hasn't broke ground on. We wrote a series of stories on the issue, which you can read here.]

Los Banos, which is the second-largest city in Merced County after the city of Merced, is about 72 miles from Fresno, where Tesco's Fresh & Easy has a number of stores.

Additionally, Los Banos is about a 90 minute drive to San Jose in the southern Bay Area, and about two and a half hours (about 130 miles) from both Sacramento and San Francisco.

It's proximity to San Jose has made Los Banos a major commuter city over the last decade because housing costs are 50%-60% (or higher) less than they are in the San Jose Metropolitan region. In fact, Los Banos has been hit so hard by the housing foreclosure crisis since 2008 that houses which sold in the $300,000 -to- $400,000 range in 2006 are today selling for almost half that amount. Merced County has been among the top five counties in the U.S. for housing foreclosures for nearly three years.

According to published data, the housing market in Merced County and Los Banos is beginning to pick up, although it's got a very long way to go. Additionally, unemployment in the county, which is primarily an agricultural and agribusiness-based economy, is 19.9%, according to the most-recent state figures, making it among the highest of all California counties. California's overall unemployment rate is currently 12.6%.

Locating a store in Los Banos is something we predicted Tesco's Fresh & Easy Neighborhood Market would do as far back as 2008. It's part of what we call Fresh & Easy's Northern California and Central Valley "critical mass" store location strategy, which is modeled after what the grocer has been and is doing in Southern California, Metropolitan Los Vegas, Nevada and Metro Phoenix, Arizona. Essentially, the strategy is to first grab store sites in the major cities in a given region, then fill in with locations in nearby suburban and smaller cities. It's also further evidence the grocer has an urban, suburban and rural store location strategy.

In the case of the Central Valley and Northern California, Fresh & Easy first obtained store sites in Bakersfield, Fresno, Modesto and Stockton, the key big cities in the Central Valley, now its starting to fill in around those major cities in places like Los Banos. Fresh & Easy has only opened stores in the Bakersfield and Fresno regions to date, although it has locations in Modesto and Stockton, as we've reported previously in Fresh & Easy Buzz. (Los Banos is about 41 miles from Modesto, which is in the Northern Central Valley. Fresh & Easy has three future store sites in Modesto.)

In Northern California, Fresh & Easy first concentrated on securing store locations (37 confirmed sites but additional unconfirmed locations we've reported on) in the San Francisco Bay Area and the Metropolitan Sacramento region's major cities and larger suburban towns. It then has been slowly branching out to smaller cities in the regions.

Of course none of the Northern California Fresh & Easy stores have yet to open. The grocer has postponed its launch into the region at least twice sine 2008. and to date hasn't talked about Northern California publicly at all. However, it still has all or most of the store sites, as we've reported on recently. [April 19, 2010 - Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait]

Fresh & Easy is also looking at potential store locations near Los Banos and elsewhere in Merced County and the Northern Central Valley, which includes the Modesto and Stockton Metro regions, as we've detailed in our ongoing reporting. For example, the grocer is looking at potential sites for Fresh & Easy stores in the Merced county cities of Merced and Atwater. Both cities are about 25 miles from Los Banos.

The fact Tesco is continuing to book future store locations in Northern California, despite having yet to open any of its stores in the region, should put to rest any rumors out there it plans to fold up shop with its Fresh & Easy Neighborhood market any time in the near future, despite the fact it recently reported another full-year loss of over $250 million for the chain.

There are currently two major supermarkets in Los Banos, a Save Mart supermarket, which is a branch of Modesto, California-based Save Mart Supermarkets, and a Food 4 Less warehouse market, which is part of a chain operated by a Northern California independent group. There's also a couple smaller, independent grocery stores and a branch of the regional El Pueblo Hispanic supermarket chain in the city.

Walmart has a discount format store in Los Banos, which it plans to remodel and turn into a hybrid supercenter, offering a full-selection of fresh foods and groceries. There's also a farily new Target discount format store in the city. It sells a fairly strong selection of groceries but not fresh foods.

In past analysis pieces in Fresh & Easy Buzz of the Central Valley region and its various grocery retailing markets we've identified Los Banos as a city that's underserved by grocery stores, based on our research and analysis.

There are currently 159 Fresh & Easy fresh food and grocery stores in California (Southern California and the Bakersfield and Fresno regions in the Central Valley), southern Nevada and Metropolitan Phoenix, Arizona.

No new Fresh & Easy stores are being opened this month. Additionally, the grocer hasn't (as of May 29) announced if it plans to open any stores in June.

Friday, May 28, 2010

First Phase of Fresh & Easy Neighborhood Market-Anchored Condo Development in San Francisco's Bayview Set For Completion in June

Northern California Special Report: San Francisco

News & Analysis

Emeryville, California-based Holliday Development is set to complete the first two buildings of its $75 million, 340 unit mixed-use residential condominium development at 5800 Third Street (at Carroll Avenue) in San Francisco's Bayview district by the end of June, according to the developer.

The development (pictured at the top) includes a Fresh & Easy Neighborhood Market store as the retail anchor, in a 15,000 square-foot space at the bottom-level of the multi-story condo development, which is on the site of a former Coca-Cola bottling plant that was closed decades ago. The space for the Fresh & Easy store is set to be completed, along with the first two residential buildings, by the end of June.

Tesco owns the 15,000 square-foot space in the 5800 Third Street condo development, which is a project of the Goldman Sachs Urban Investment Group. The Goldman Sachs Urban Investment Group is part of the Merchant Banking Division within The Goldman Sachs Group Inc. According to the developer, Tesco's Fresh & Easy still holds the space and still plans to open a store in the development.

The 5800 Third Street project has encountered numerous hiccups since December 2007, including a construction stoppage in the summer of 2008 and the replacement by Goldman Sachs after that of the original developer, Houston, Texas-based Noteware Development, with Bay Area-based Holliday Development. And of course there's the global financial and credit crisis which started in late 2008 and has heavily impacted Goldman Sachs.

Holliday Development has an additional 5,685 square-feet of retail space for lease in the development. Most or all of that space will likely be taken by a restaurant operator, according to our commercial real estate sources.

The Third Street & Carrol Avenue condominium project was kicked off with a big bang on December 13, 2007, featuring a ground-breaking ceremony and press conference attended by San Francisco Mayor Gavin Newsom, Goldman Sachs executives, Tesco Fresh & Easy Neighborhood Market CEO Tim Mason and other dignitaries. Tesco's Fresh & Easy used the ground breaking ceremony and press conference to signal its intention to open numerous Fresh & Easy markets in the San Francisco Bay Area and elsewhere in Northern California. In January 2008 the grocer announced it's plans to open 18 Fresh & Easy stores in the San Francisco Bay Area.

As regular readers of Fresh & Easy Buzz know, Tesco hasn't to date opened any of its confirmed 37 stores (18 in the Bay Area and 19 in the Vacaville-Sacramento region) in the Northern California market.

As we wrote in this piece on April 19, 2010 - Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait - Tesco is debating whether or not to start opening some of the 37 (19 in the Vacaville-Sacramento region and 18 in the San Francisco Bay Area) this year.

However, the fact that the 5800 Third Street condo project will have its first two buildings completed next month, suggests Tesco could open its first Fresh & Easy store in Northern California this year, at 5800 Third Street.

Of course Tesco's Fresh & Easy Neighborhood Market could wait until 2011 to open the store, although leaving it sitting empty for six or more months after the first two buildings in the condo project have been completed isn't a smart thing to do, in our analysis. Fresh & Easy has already generated a considerable amount of ill will from many residents living in the numerous Northern California neighborhoods where its future store sites - some completed, others partially worked on, and still others in which no construction has even began - have sat unopened for over two years.

As we've mentioned in past pieces in Fresh & Easy Buzz, it's our analysis that the 5800 Third Street location in San Francisco has the potential to be the best performing store of the 37 confirmed Fresh & Easy Neighborhood Market locations in Northern California. We still believe that to be true.

We've also long held that the store in the Third & Carrol Street development will be the first Fresh & Easy unit Tesco opens in Northern California. We still predict this will be the case.

Among the reasons 5800 Third Street should be the first Fresh & Easy store for Tesco to open in Northern California are: It's located in the region's premiere city, San Francisco; the Bayview neighborhood is an urban "food desert," a fact much attention was given to, including by San Francisco Mayor Newsom, when Tesco announced its plans to open the store in December 2007; and the store is new, from-the-ground-up construction, and thus can serve as a showcase for the grocer in its Northern California region launch. As such, we predict it will be (and if not should be) the first store Tesco's Fresh & Easy Neighborhood Market opens in Northern California.

For example, at that December 2007 press conference, current San Francisco Mayor Newsom, who's running for the position of California Lieutenant Governor said: "I applaud the Goldman Sachs Urban Investment Group for its vision and I am excited that an institution like Goldman Sachs is making a long term commitment to this city. A development like 5800 Third Street is critical for the revitalization for this area and the broader Bayview community. This project represents exactly the kind of growth we are trying to encourage across the City."

Newsom and members of a coalition of San Francisco elected officials and Bayview residents, who've been working to attract grocers to the neighborhood for many years, also praised Tesco and Fresh & Easy Neighborhood Market CEO Mason at the December 2007 press conference for its decision to locate a Fresh & Easy market in the Bayview district.

Based on information from our sources, however, Tesco has not yet decided if it will open the 5800 Third Street, San Francisco, store - or any of the other sites in Northern California - this calendar year. Tesco operates on a fiscal year system. It's 2010/11 fiscal year, which started in February 2010, ends at about that same time in 2011.

If Tesco's Fresh & Easy Neighborhood Market plans to open the 5800 Third Street location this year - or even by early 2011 - we should know very soon, since once the 15,000 square-foot building is completed the grocer would have to start work on its interior - installing flooring, shelving, checkout stands, refrigerated and frozen cases and the like - which takes at least a few months to do. Stay tuned.

Selected Related Posts - Fresh & Easy and San Francisco's Bayview

April 13, 2009: Despite Postponing its Northern California Launch Again Earlier This Year Tesco's Fresh & Easy Planning Third San Francisco Store; First Stockton Unit

April 13, 2008: San Francisco: Cool Bay Breezes, A City Full of History, Cable Cars--And A 'Fresh & Easy' State of Mind

June 1, 2008: Upcoming New Markets Special Report: From Food Desert to Urban Oasis? Tuesday Election Could Change San Francisco's Bayview-Hunters Point Forever

May 15, 2008: Fresh But Never Easy: Tesco's Long But Rapid South-North March in the Nation-State of California

July 29, 2008: Tesco's Fresh & Easy and San Francisco's Tenderloin Redux: Upcoming Developments Offer First Mover Opportunity For Fresh & Easy or Competitors

January 24, 2008: Fresh & Easy Locking-Up Leases For Northern California Invasion

January 30, 2008: Fresh & Easy Goes On the Record: Announces 18 Northern California Stores in the Bay Area

July 2, 2008: Tesco's to Open A Fresh & Easy Grocery Market in Low Income, Underserved South Central Los Angeles Neighborhood

Click here and here for a selection of past stories about Tesco's Fresh & Easy Neighborhood Market and the San Francisco Bay Area. (See the numerous links to other posts as well. Also you can click the "newer posts" and "older posts" links at the bottom of each page.)

Click here and here for a selection of past posts about Tesco's Fresh & Easy Neighborhood Market and Northern California (See the numerous links to other posts as well. Also you can click the "newer posts" and "older posts" links at the bottom of each page.)

Recent Stories in Fresh & Easy Buzz's Northern California Special Report Series

April 19, 2010: Tesco Debating Whether to Launch Fresh & Easy Into Northern California This Fiscal Year... or Wait

May 8, 2010: Sprouts, and Likely Henry's to Beat Fresh & Easy to Northern California Despite it's Big Head Start

May 9, 2010: A Whopping 15 of Whole Foods Market's 41 New Stores in Development are in California - And Nine of The 15 Are In Northern CA

Wednesday, May 26, 2010

New Report: How and Where Americans Spend Their Food & Grocery Dollars

The consumer and money website Bundle.com, which is backed by Microsoft, financial services company Citi and the investment firm Morningstar, has produced what it calls its first-ever Bundle Report, which is titled: "The 2010 Bundle Report: How America Spends." The comprehensive report uses data obtained from Citi, the U.S. Federal Government and third-party sources, to arrive at an analysis of how much money, excluding housing costs, the average American household spent in 2009.

As the numbers depicted in the infographic here show, the average American household spent $37,782 in 2009, not counting mortgage or rent (which are not included in the Bundle data).

In the report, Bundle.com divided the $37,782 spent in 2009 by the average American household into six categories. The six categories and the percentage of the $37,782 spent in each of them are: 23 percent of their daily budget on shopping, 14.5 percent on getting around (gas and auto expenses), 17.5 percent on food and drink, 7 percent on travel and leisure, 17 percent on house- and home-related expenses, and 21 percent on health and family.

How, where Americans spend their food & grocery dollars

Most interesting to Fresh & Easy Buzz - as well as the most useful aspect of the report for grocers and food marketers - is the analysis the Bundle.com researchers did in the food and drink category.

First, using their data, the researchers looked at the demographics of U.S. food and grocery spending overall, breaking down the percentage spent on groceries (at all food and grocery retailing classes of trade) and at restaurants (of all types and formats). The results of their analysis is depicted in the infographic here.

As you can see in the graphic, Bundle.com determined the average American family spent $3,778 in 2009 on food and groceries at retail stores, while spending $2,736 dining out. [There are additional details and links here.]

Second, the Bundle.com researchers examined consumer spending in major U.S. cities when it comes to groceries and restaurants, developing a top ranking by city.

As the infographic here shows, Austin, Texas is the number one food and drink spending city, while Detroit, Michigan is dead last. Note the stark differences between number one Austin - $12,447 total ($6,146 annually on food-groceries at retail and $6,301 dining out)compared to $2,246 total ($1,375 at retail annually and $871 dining out) for last place Detroit.

The Bundle.com researchers point out five interesting aspects of their food-grocery-drink ranking by city:

• Austin, TX, residents spend almost twice ($6,301) the US annual average for dining out.
• In fact, five average Detroit households (the nation’s lowest spenders) can eat on one Austinite’s food budget.
• If Manhattan were its own city, it would be No. 1 for food spending ($13,079) and No. 1 for share of food budget spent on restaurants (59%).
• In Atlanta, dining out accounts for 57% percent of the city’s average total food and drink spending annually, the highest in the US and 28% higher than the US average.
• Denver residents allocate 22 percent of their daily spending to food, more than any other big city in the country.

It's important to note though, and the researchers do so, that like the rest of the study the city ranking data doesn't include what the average American family spends on either a mortgage or rent. We suspect this fact accounts for why New York City, San Francisco and Los Angeles, for example - all places with high housing costs and rents but big food spending cities according to other data sources - aren't higher-up in the ranking. But despite this variable - the intentional omission by the researchers of the housing cost data - the study remains not only interesting but useful.

Tesco's Fresh & Easy Neighborhood Market

In terms of Tesco's Fresh & Easy Neighborhood Market, just one of the grocer's current 159 fresh food and grocery stores is located in the top 15 cities ranked in the Bundle.com study. That store is in Scottsdale, Arizona, which is ranked number nine.

Fresh & Easy has numerous stores in Orange County in Southern California but none in Irvine, which is ranked number 7 in the study. In addition, there are nearly 40 Fresh & Easy stores in Arizona but none in Tuscon, which is ranked 12th in Bundle's city ranking.

Further, Fresh & Easy Neighborhood market has stores in just six of the top 50 ranked cities - Scottsdale and Chandler (ranked number 33) in Arizona; Henderson (ranked 31rst), Nevada; Los Angeles (ranked 16th) and Santa Ana (ranked 49th) in Southern California; and in Bakersfield, California (ranked 50th)

A final word: Like all such studies, this one should be used in conjunction with other food and grocery consumer purchase research and data. The reason for this is because no one study is precise. Using multiple data sources allows for a check and balance system, along with arriving at a more precise snapshot of consumer food and grocer purchase data and demographics. Having said that, in our analysis and opinion, Bundle.com's comprehensive study is a valuable tool for retailers, marketers and consumers.

Make sure in using the study you pay attention to the numerous links at the pages here, here and here. At these links are numerous other features Bundle.com provides regarding its study and data, as well as download links for the infographics presented.

The researchers describe in depth the methodology they used in the study here. We compliment the Bundle.com researchers on their work.

Sunday, May 23, 2010

Director of Grocery Sean McCurley Leaving Fresh & Easy Neighborhood Market to Return to Tesco in the UK

Breaking Buzz

Corporate director of grocery buying and merchandising Sean McCurley is leaving Tesco-owned Fresh & Easy Neighborhood Market to return to Tesco's global headquarters in Cheshunt, United Kingdom, where he worked prior to joining the U.S. fresh food and grocery chain as director of fresh foods, Fresh & Easy Buzz has learned. Mr. McCurley was a member of the original group of Tesco executives and others who started up Fresh & Easy Neighborhood Market in Spring 2006.

According to our sources, McCurley is set to leave Fresh & Easy's El Segundo, California headquarters to return to work at Tesco in the UK as early as the end of this month, but no later than June 12.

We're told Sean McCurley is leaving Fresh & Easy on good terms with Tesco.

His specific new position at Tesco in the UK isn't clear. But it will be in the commercial (buying and merchandising) area.

McCurley was Fresh & Easy's director of fresh foods until August 2008, when he became director of grocery, replacing Charlotte Maxwell, who left Fresh & Easy and returned to the UK that month. [See - August 17, 2008: Special Report: Tesco Fresh & Easy's Director of Grocery Returning to the UK; Grocery Chain Reorganizing its Corporate Buying Department] [August 22, 2008: Special Report: Today Last Day For Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell; Moving Back to Tesco in the UK]

Charlotte Maxwell left the employment of Tesco not long after. She moved to Australia in the spring of 2009, joining a group of British supermarket industry veterans who took over management of Australia's Coles supermarket chain. [See - December 25, 2009: It's 'British Invasion: The Sequel Down Under' For Former Tesco Fresh & Easy Neighborhood Market Director of Grocery Charlotte Maxwell.

Sean McCurley has held the corporate director of grocery position at Fresh & Easy since Ms. Maxwell's departure in August 2008.

In December of 2009 Jim Jensen, the then director of fresh foods at Fresh & Easy, who was promoted to that position from a category manager slot in August 2008 to replace McCurley, left Tesco's Fresh & Easy Neighborhood Market to accept a key position at Walgreens drug in its start up fresh-prepared foods program, as we were the first publication to report. [See - January 6, 2009: Breaking Buzz: Corporate Director of Fresh Foods Jim Jensen Leaves Tesco's Fresh & Easy] [January 15, 2010: Just-Exited Tesco Fresh & Easy Fresh Foods Director Jim Jensen to Head New Fresh Foods Initiative at Walgreens Drug Chain.] [January 21, 2010: Walgreens Announces Hiring of Former Fresh & Easy Fresh Foods Director Jim Jensen; Confirms Our January 6 Report]

Jensen was recruited to Walgreens by former Tesco Fresh & Easy vice president of retail operation Brian Pugh, who left Fresh & Easy in the summer of 2008. Pugh joined Walgreens, where he's currently vice president of merchandising, in 2009.

Jim Jensen's vacated director of fresh foods position was recently filled by Tim Lee, who came to Fresh & Easy Neighborhood Market from Tesco's corporate headquarters in the UK. Tim Lee was a corporate director of produce group procurement at Tesco in the UK prior to leaving to join Fresh & Easy as director of fresh foods.

Lee and another Tesco produce category procurement director, Alex Dower, launched Tesco's global fresh produce sourcing buying and supply chain initiative in about mid-2009. The initiative focuses on direct procurement of fresh produce for Tesco stores in the United Kingdom and continental Europe. Lee's responsibilities included setting up satellite offices in growing and sourcing regions around the world and staffing the offices with technical specialists and produce buying teams.

Dower left Tesco last year to join the London-based fresh-prepared foods-maker and retailer Pret A Manger, which in addition to having over 100 shops in the UK and eight in Hong Kong, has over 20 stores in New York City, one in Washington D.C. (soon to be two), and is opening its first ready-to-eat, grab-and-go fresh foods shop in the Chicago area in August of this year.

Tesco's Fresh & Easy Neighborhood Market divides its corporate buying and merchandising function into two departments - grocery and fresh foods. Internally it uses the British industry terms, which are "ambient" for grocery and "fresh" for fresh foods. Fresh foods at Fresh & Easy consists of produce, meats-seafood, dairy-deli and fresh-prepared foods. Everything that's ambient - dry grocery, non-foods and the like - is under the grocery department.

Sean McCurley's departure affords Tesco's Fresh & Easy Neighborhood Market the opportunity to hire a new corporate director of grocery buying and merchandising who has a strong background in U.S. food and grocery retailing in general and extensive experience (mixed with talent of course) in the Western U.S., particularly in California. Fresh & Easy's chief commercial officer (the British industry term they use for buying and merchandising) John Burry is from Tesco in the UK, as is recent arrival, director of fresh foods Tim Lee.

It will be interesting to see if Fresh & Easy Neighborhood Market CEO Tim Mason, who's also a Tesco plc corporate director, takes the above approach or if Tesco replaces Sean McCurley with someone from the UK, as in the case of Tim Lee replacing Jim Jensen. Jensen is an American who never worked for Tesco prior to being hired by Tesco's Fresh & Easy.

Tesco currently has 159 of its small-format (10,000 -to- 13,000 square-foot) Fresh & Easy Neighborhood Market fresh food and grocery stores open and operating in California (Southern and the Central Valley areas of Bakersfield and Fresno), Metropolitan Las Vegas Nevada and Metro Phoenix, Arizona. In a November 27, 2007 presentation made in Southern California by CEO Tim Mason and his senior management team, Tony Eggs, Fresh & Easy's chief real estate officer, said there would be about 200 stores open and operating by February 2009. The grocer is about 60 stores shy of 200 units 15 months beyond February 2009, for those keeping count.

Thursday, May 20, 2010

H-E-B Tweaking Product Assortment at Joe V's Smart Shop Discount Grocery Store in Texas Opened May 5

Discount Format Food & Grocery Retailing

A mere two weeks after opening its first Joe V's Smart Shop discount grocery store in Houston, Texas on May 5, San Antonio, Texas-based grocery chain H-E-B this week is giving the new store's product assortment a bit of a tweaking, Fresh & Easy Buzz has learned.

The product assortment adjustment started on Wednesday (May 19), and is based on feedback and other inputs the grocer has gleaned over the two weeks Joe V's has been open, according to Joe Villarreal, the general manager of H-E-B's Joe V's Smart Shop division.

We aren't surprised family-owned H-E-B would be doing a product assortment adjustment only two weeks after the discount format grocery store opened. H-E-B is among the most fastidious and best retail grocery merchandisers in the U.S. It's a good - and smart - sign at the smart shop.

Additionally, since Joe V's Smart Shop is a new format for H-E-B, and it's first price-focused discount grocery format to boot, it makes good and logical sense in our analysis for the grocer to tweak the store's product assortment so early in the game, and continue doing so regularly.

Since Joe V's is a limited assortment discount format - the store carries about 9,000 SKUs -regular product assortment adjustment is even more important for H-E-B, or for any other grocery chain that operates a limited assortment format, because with a limited assortment a retailer has to obtain the maximum sales bang from far fewer SKUs than a typical supermarket carries. For example, the average U.S. supermarket, which averages 46,755 square-feet, carries 46,852 SKUs, according to the Food Marketing Insitute's research. FMI is the leading trade organization for the U.S. food and grocery retailing industry.

That H-E-B, which was founded 105-years ago and does $15 billion in annual sales in about 300 stores in Texas and Mexico, is adjusting the Joe's V's Smart Shop product assortment so early is a sign the grocer understands the importance of item optimization when it comes to operating a limited assortment discount grocery format.

Fresh & Easy Buzz has heard from a few readers who've visited the Joe V's Smart Shop store in Houston in the two weeks it's been open. All of the readers told us the store was extremely busy during their visits.

Big reusable grocery bag giveaway at Joe V's

H-E-B is also taking an aggressive approach with Joe V's. Smart Shop in the area of reusable shopping bags.

During the store's first eight opening weeks, which started on May 5, the grocer is giving each shopper who makes a single item qualifying purchase four free reusable grocery bags, according to general manager Joe Villarreal. (Here's an example of a qualifying item.) The purpose of this aggressive approach is to equip as many customers as possible with reusable bags at no charge, so they can bring the bags with them to the store on return trips, thereby dramatically reducing the amount of single-use plastic carrier bags Joe V's uses on an ongoing basis.

H-E-B's Joe V's smart shop division initially considered not offering single-use plastic carrier bags at the store at all, according to Joe Villarreal. However, it later decided to offer them, but to give out the reusable bags for free as a way to encourage regular use of the bags by customers.

The free reusable bag promotion also fits into what is a key promotional feature at H-E-B's Joe V's Smart Shop, which is what the grocer calls its FREEBIE! And the tagline is: "There's always something free at Joe V's."

And yes, Jose Villarreal, or Joe which he uses in e-mail correspondence, is the person and name, at least inspirationally, behind the Joe V's Smart Shop format and store name, although neither H-E-B or Mr. Villarreal has stated Joe V's Smart Shop is directly named after its general manager, Joe Villarreal.

Related stories from Fresh & Easy Buzz:

May 5, 2010: H-E-B Opens Joe V's Smart Shop Discount Prototype Grocery Store in Houston TX ... But Where's Joe?

May 6, 2010: Say it Ain't So Joe: Trader Joe's Tells H-E-B's Joe V's Smart Shop to Change its Name

Welcome to Discountopia USA

The Insider: Heard on the Street

[ Fresh & Easy Buzz's The Insider columnist departs a bit today from his usual column format to offer some analysis and commentary on the growth of the discount food and grocery retailing segment in the United States, the rush to create new price-focused, discount grocery formats, and the proliferation of new stores by existing discount segment grocery retailers.]

The price-focused discount food and grocery retailing segment and number of discount format stores in the U.S. is growing like topsy.

Exhibit A: Supervalu, Inc. the third-largest traditional supermarket chain and fourth-largest retailer of food and groceries in the U.S., says it's doubling the number of its hard-discount Sav-A-Lot stores over the next five years, from about 1,200 currently to about 2,400, including opening 100 new Sav-A-Lot units this year.

Then there's Aldi USA, the American division of Germany's Aldi International, the global hard-discount grocery retailing company. Aldi USA is opening about 100 new stores as well this year, including a few dozen in its newest market of Texas, which it entered in late 2009. Aldi USA opened around 100 new units in 2009.

In the Western U.S., Idaho-based Winco Foods, which is an every-day-low-price (EDLP) supermarket chain operating stores in the 90,000-1000,000 square-foot range, is opening numerous new stores in the Western U.S. and plans to enter Arizona with multiple stores in the near future.

Last - but far from least - is the EDLP discounter from Bentonville, Walmart Stores, Inc. Walmart continues to open new supercenters, convert existing discount stores into combination food-grocery and general merchandise supercenters, and locate smaller, hybrid supercenters, like the one it opened in Modesto, California in 2008, in vacant buildings in the 70,000 -to- 100,000-plus square-foot range, as it can find them. For example, It currently has two such hybrid supercenters planned for Southern California in vacant buildings of about 75,000 -to- 80,000 square-feet.

The brawny retail brawler from Bentonville also continues to test various small and smaller-format food and grocery stores, including its Marketside by Walmart, Neighborhood Market (and Neighborhood Market by Walmart), Supermercado de Walmart (Hispanic format supermarket), along with its combination grocery and general merchandise Latino consumer-focused supercenter and club store formats.

Exhibit B: Next there's the fast-growing dollar-store discount format. Most dollar-store retailers offer a substantial selection of packaged food and grocery products in their stores. And some, like the Southern California-based 99 Cents Only chain, devote about 50% of store square-footage to food and grocery items, including fresh meats, produce and other perishables.

Dollar General Corp., the largest U.S. dollar store format chain with more than 8,800 outlets in 35 states, plans to open a whopping 600 new stores this year.

Additionally, Family Dollar, which has about 6,600 locations in the U.S., says its adding about 200 stores this year. Family Dollar has been increasing the amount of square footage it devotes to food and grocery items in its stores over the last year. [Suggested reading - April 15, 2009: Family Dollar Discount Store Chain Increasing Amount of Store Square Footage Devoted to Merchandising Food-Grocery Items in Stores Beginning in May] The retailer's percentage of sales from consumables has increased significantly since the recession began.

And not to be outdone, Dollar Tree, which has 3,800 U.S. locations, says it too is opening around 200 new stores in 2010.

Lastly, the earlier mentioned Southern California-based 99 Cents Only dollar format chain is also in expansion mode, opening numerous new units this year and entering new markets such as Northern California, where it opened its first store in 2009, and has plans for many stores over the next couple years.

Exhibit C: The disount segment is getting new entrants. New discount food and grocery store formats are popping up all over. For example, Texas grocer H-E-B opened it's discount store prototype store, Joe V's Smart Shop, in Houston, Texas on May 5. If Trader Joe's has its way the Joe V's name won't last long. But it's the format, not the name, The Insider is concerned with today.

Additionally, on Thursday (May 13) the Giant Eagle supermarket chain, which is based in Cincinnati, Ohio, opened the first two stores of its new Value King no frills, discount store format. The two stores, which are about 27,000 square-feet, are located in Pataskala and Reynoldsburg, Ohio. More units are on the way.

Like Aldi and Save-A-Lot, Giant Eagle's Valu King format is limited assortment. The stores carrying about 3,000 SKUs. And like the two hard-discount grocers, Valu King is all about low prices.

Southern California-based Smart & Final is also getting into the discount format grocery retailing business. This summer is will open five SmartCo Foods supermarkets, a new format for the retailer, in the Metro Denver, Colorado market region. Plans call for numerous additional units in the state. The first five stores will all be in former Albertsons supermarkets.

According to Smart & Final, the SmartCo Foods format combines the features of a supermarket, warehouse club store and farmers market, with a focus on price and value.

The retailer operates Smart & Final banner non-membership warehouse stores, cash & carry stores, small supermarkets called Smart & Final Extra and the Henry's Farmers Market chain, so the synergies are certainly there to combine those formats into one. Whether it will be a success or not is another question, as is always the case. Combining the various formats under one roof into a single format could be a powerful combination if done well. Doing so also appears to offer a strategy beyond just price. The SmartCo Foods stores are about 30,000 -to- 40,000 square feet.

Numerous other grocers are looking at and working on discount grocery store formats. Discount seems to be today what the upscale format was in the U.S. from the early 1990's -to- the early 2000's in terms of focus and ubiquity. You might call that era "upscaletopia."

If you multiply the square-footage of just the new discount stores The Insider has mentioned so far, it adds up to millions of new discount food and grocery retail square-footage in the U.S. over this year and next.

The sixty four thousand dollar question (well, one million dollar question, indexed for inflation) is: 'Can all of this additional discount grocery square footage be absorbed in the U.S.?'

The Insider isn't sure it can be. After all, this collective discount store growth was hatched in the midst of a recession. While I believe frugality in grocery shopping will be with us for another couple years at least, and perhaps to a limited extent become a longer-term trend, we're already seeing many wealthier and perhaps not so wealthy consumers turning back to higher-end grocers for at least some of their food and grocery shopping. For example, Whole Foods Market reported last week it doubled its net income for its fiscal year second quarter over last year.

As the economy improves, particularly employment and consumer confidence, The Insider thinks the trend towards more shopper dollars going to higher-end grocers will increase even more so. I don't expect a rapid return to upscale store grocery shopping like we've seen in past recessions; this one is too long and to deep. But we will see a return to a noticeable degree, none-the-less.

With all the new discount retail grocery square-footage coming on line don't be surprised if come about mid-2012 we don't see some of the discount operators face a crisis of sorts similar to and the converse of what many supermarket and upscale grocers have been facing for the last few years, mainly an over-saturation of discount format square-footage for what the current, recessionary market will bear.

When unemployment is back to say seven percent or so and consumer confidence is much higher - let's say by early 2011 if the gods are with us - might we not see a significant flight from discounters to more mainstream supermarkets and upscale operators, just at the time when so much of this new discount grocery square-footage is online in the form of existing operators opening new stores and in new stores created by the numerous grocers now introducing their discount prototypes?

Of course, many economists and analysts believe the U.S. is in the midst of a trend towards becoming an overall poorer country in terms of average income. And, unfortunately, there are numerous statistics that suggest this might be the case. In many ways, the retailers bringing all this discount grocery square-footage on the market are betting on this trend, consciously or unconsciously. And if it is true, they might have a winning hand.

But The Insider has seen format trends on fast-forward before, and can't help thinking that's what might be happening when it comes to the discount segment. For the last three years it's been the winning format in U.S. food retailing. As such, just like when one sees winning trends in other walks of life, it's tempting to jump on the one that's currently performing best and ride it, both because you think it could work, but also because you fear if you don't your competition, who operates a discount format, just might eat your lunch. Just like basketball, grocery retailing requires both offense and defense, after all.

Ironically, The Insider believes one state where opportunity does strongly exist for additional hard-discount grocers is California, specifically in some regions of Southern California like the Inland Empire, Los Angeles and a couple others, along with in the Central Valley, from Bakersfield south to Fresno, and into the Northern Valley to Stockton, then on up to the Sacramento region.

Aldi has no presence in California. And Supervalu, Inc. has just a handful of its Sav-A-Lot stores in the state - a couple in Southern California and a couple in the southern Central Valley.

Further, Walmart has a minimal food and grocery retailing presence in these California regions, which is something the mega-retailer is working hard to change.

Winco Foods is putting a major effort in opening new stores in Southern California, the Central Valley and in the Sacramento area, but at present has only a handful of its 74 stores are located in these regions.

The main price-focused discounters in these three regions of California are big box warehouse chains and independents like Food 4 Less (Southern California and the Central Valley), Save Mart's FoodMaxx (Central Valley and Sacramento region) and a few others. These grocers by and large do well in the discount niche, and of course there are other competitors like supermarkets, mass merchandisers and club stores (and those dollar format stores) going after the discount shoppers food and grocery dollar. But I do see an opportunity for hard-discount format grocers like Aldi, Sav-A-Lot and others to open some stores in these regions - and do well. Store location is key, of course.

The Insider thinks there's also an opportunity for a couple existing , local supermarket chain operators in these California market regions to create smaller-format (under 50,000 square-feet) discount stores. I'll be addressing that concept specifically in a future column.

From a retail format and merchandising perspective, Tesco's Fresh & Easy Neighborhood Market stores have one foot (or perhaps aisle is a better metaphor) in the discount grocery segment, a second aisle in the fresh, prepared foods segment, a third in the Trader Joe's-like niche, and a fourth aisle in the mini-Whole Foods Market niche. So far this hybrid merchandising approach under one roof as a format hasn't shown success. There's still time for it to do so of course. Low price, both everyday and via promotions and store coupons, is s key focus across all categories at Fresh & Easy though.

The Insider's overall bottom line: Once the recession ends and unemployment starts coming down in the U.S., grocers that have an exclusive or majority price focus will need to have a post-recession strategy in place that includes other elements of merchandising for two reasons. First, with all the new discount food and grocery square-footage coming on the market, competition in the segment will be even stiffer than it is now. Second, as the economy and consumer confidence continue to improve, more and more shoppers will take some of their food and grocery dollars back to higher-end grocers. We're already seeing signs of this with last week's Whole Foods Market numbers and yesterday's first quarter report from Walmart, which saw a slight drop in same-store-sales for its U.S. stores. The retailer even attributed it in part to wealthier shoppers who've been shopping Walmart in the recession trading up and returning to higher-end chains like Target and others.

Shopper frugality is going to be with us for sometime. However, there's also a pent-up desire among consumers to splurge a bit. As the economy improves I see that desire being fulfilled to a certain extent at the expense of grocers that focus only on price.

When it comes to retailing in general, and particularly food and grocery retailing, focusing on price is actually the easiest thing to do from a merchandising, although not a profitability, standpoint. But if a retailer focuses too exclusively and for too long on just price at the expense of the other merchandising elements its retailing skills can get a bit rusty.

Shopper frugality is going to be with us plenty longer. But there's also a pent-up desire among consumers to splurge a bit, including on food and groceries. For example, the talented, savvy and observant east coast independent grocer Stew Leonard Jr. said this week his customers are doing just that, sighting as one example a substantial increase in sales of high-end cheeses at his four high-volume Stew Leonard's supermarkets. As the economy improves, this trading up by shoppers, combined with all the new discount grocery retail square-footage being added in the U.S., could pose a big challenge for those retailers with all or most of their focus in the discount segment.

[The Insider's Heard on the Street column is a regular - weekly -to- fortnightly (every two weeks for the non-bilingual) - feature in Fresh & Easy Buzz. "The Insider" will be exploring all aspects of what's happening in - and what he's hearing about - the food and grocery retailing business, with a focus on - but not limited to - California, Nevada and Arizona - the three states where Tesco has its Fresh & Easy Neighborhood Market fresh food and grocery stores.]

>Read The Insider's previous column - April 29, 2010: Heard on the Street: There's Something About Albertsons ... In Southern California.

Wednesday, May 19, 2010

Should Adults With Kids, Expectant Moms and Hybrid Auto Drivers Get Preferred Parking at Fresh & Easy?

Fresh & Easy Neighborhood Market takes reserved - and preferential - parking to the next level at its store parking lots. Along with the special "handicapped" parking spots right in front of the stores, which are required by law, the grocery chain offers additional reserved spots for (1) adults with children (with them at the store, not being parents in general), (2) expectant mothers and (3) hybrid vehicles.

Of course, enforcement is another thing.

For example, we've yet to see a Fresh & Easy store clerk ask any customer parked in the "adults with children" spot to produce the kids for verification. Nor have we seen "hybrid vehicle verification specialists" patrolling the parking lots.

In the case of the "expectant mothers" parking spot, some people might say proof can be had with a quick visual. But that's not even completely true, particularly during the first few months of pregnancy. And, what if the customer isn't actually pregnant, just a bit big-boned? Further, what about the father-to-be, who just might be wearing an Empathy Belly? The majority of the Fresh & Easy stores are in California. Should the physically empathetic future dad be excluded from using the reserved spot? He's pregnant after all, just not biologically.

In other words, parking behavior in the reserved parking spots - with the exception of the legally required "handicapped" zones - is on the honor system.

A Fresh & Easy Buzz reader from Bakersfield, California sent us a video clip from last night's ABC TV Channel 23 news broadcast in Bakersfield. The topic of the news report is the preferred parking spots at Fresh & Easy, specifically the store at California Avenue & Stockdale Highway, in the city.

Channel 23 reporter Erin Briscoe interviewed shoppers at the store, asking them what they thought about the various forms of preferred parking at the Fresh & Easy market. She also interviewed a law enforcement officer about enforcement of the reserved parking spots.

The opinions of the various shoppers, and law enforcement, are interesting and insightful, which is why we're sharing them with out readers.

Click here to view the video from last night's report on Bakersfield's Channel 23 News. There's also a brief write up about the report there.

[Readers: Feel free to offer your opinion about Tesco Fresh & Easy Neighborhood Market's reserved parking policy and the three types of preferential parking it offers: hybrid cars, parents with kids, and expectant moms. Just click the "comments" link below - and opine away.]

Monday, May 17, 2010

A Celebrity Endorsement For New York Grocery Chain Wegmans That's as Good as Mom's Apple Pie

Late last week actor Alec Baldwin appeared on David Letterman's late night talk program, "The Late Show."

During Baldwin's spot on the show Letterman asked the popular actor about his mother, who recently celebrated her 80th birthday. Baldwin talked at length with Letterman about his mom, who lives in upstate New York.

In addition to detailing what he says are his mom's secrets to longevity, which are well worth hearing because they're not only funny but very politically incorrect in today's health and nutrition-conscious environment, Alec Baldwin told Letterman why, despite his encouragement, his 80-year old mom just won't leave the cold winters of upstate New York for sunny California, where two of his actor-brothers live.

Hint: Her reason for not leaving involves the upstate New York-based Wegmans grocery chain. It's a money can't buy celebrity endorsement for Wegmans.

Sunday, May 16, 2010

Two Grocers, Fresh & Easy and Raley's Offer Two Very Different Approaches to Ready-to-Grill Fresh Meat Merchandising

Fresh Foods Category Merchandising: Meat, Poultry and Seafood

The upcoming three-day Memorial Day weekend holiday marks the "official" start of the grilling season for Americans, although with gas barbeques, covered patios and indoor grills, grilling season has become a nearly all-year affair in many parts of the U.S.

Grilling season offers food and grocery retailers the opportunity to not only increase sales of those center of the plate fresh meat items for grilling like beef, pork, poultry and seafood, but also of related items such as fresh produce, starches, condiments, breads, beverages, non-foods and more.

Over the last few years food retailers have increasingly been competing for shoppers' grilling season dollars, looking to create not only a competitive advantage over other grocers on the price (lowest) and quality (value) of fresh meat, poultry and seafood items, but also coming up with ways to ad value to those raw animal delights, which will find their way to a hot grill soon after being brought home from the supermarket. We call it: Ready-to-Grill fresh meat merchandising.

Two California grocery chains, El Segundo (Southern), California-based Fresh & Easy Neighborhood Market and Sacramento-based Raley's, have each created different ways to ad value to fresh meat, poultry and seafood items sold in their stores for the prime grilling season and beyond. The goal of both grocers is the same: To increase fresh meat category sales by tapping into shoppers' desire for convenience in the form of ready-to-prepare foods.

Fresh & Easy Neighborhood Market

Fresh & Easy Neighborhood Market, which is owned by United Kingdom-based Tesco and has 159 stores in California (Southern California, Bakersfield and Fresno metro-areas in the Central Valley), southern Nevada and Metropolitan Phoenix, Arizona, and annual sales of about $544 million, is introducing eight new fresh meat and chicken grill packs to its stores, adding to the six varieties it already offers.

The eight new fresh & easy branded grill packs are:

>12 Quarter Pound Hamburger Patties (3 lbs)

>Smokey BBQ Boneless Pork Chops (1 lb 4 oz)
>BBQ Marinated Chicken Thighs and Drumsticks (2 lbs 2 oz)
>Buffalo Marinated Chicken Thighs and Drumsticks (2 lbs 2oz)

>Lime & Cilantro Chicken Breast (1 lb 4 oz)

>Teriyaki Chicken Breast (1 lb 4 oz)

>Santa Maria Tri Tip

>Smokey Garlic Pork Tenderloin

Seven of the eight new grill pack items are value added, meaning they contain marinades, sauces and seasonings, so all shoppers (and grill-masters) need do is open the package and toss the meat on a hot grill.

The key customer proposition from Tesco's Fresh & Easy with the value-added grill packs is: convenience; ready-to-grill.

Raley's

Sacramento, California-based grocery chain Raley's, which operates 133 supermarkets under the Raley's, Bel-Air, Nob Hill Foods and Food Source banners in Northern California and has annual sales of about $3.4 billion, is taking a very different approach to adding value to the fresh meat, poultry and seafood items it sells in its stores, both for grilling season and everyday. Raley's recently introduced a "Marinades & Rubs Station" in its stores' meat departments.

The in-store kiosk (pictured above) offers 24 varieties of free meat, poultry and seafood marinades and seasoning rubs - 12 marinades and 12 rubs. Customers simply take the meat, poultry and seafood items they've selected while shopping over to a clerk at the in-store station or kiosk, then choose from the 24 varieties which one(s) they would like on the various items. The clerk then marinates or "rubs" the meats for the shopper free of charge. [You can view a list of the 24 varieties here.] Raley's offers recipes featuring the various marinades and rubs at the kiosk and online at its website.

Limited vs full mass-customization

We call Fresh & Easy's value-added, pre-packaged grill pack approach "limited mass- customization." The concept of mass-customization applied to retail food and grocery merchandising essentially means attempting to add value to and customize products, such as fresh meats, to shoppers taste preferences in a general but yet somewhat specific way.

The pre-marinated and pre-seasoned grill packs offer one option per item-package to shoppers. For example, if a customer wants a Smokey-Garlic Tri-Trip rather than a Santa Maria Tri-Tip, it's not available. The same is the case if a shopper wants a Santa Maria Pork Loin rather than a Smokey-Garlic Pork Loin. Further, You can get a Lime & Cilantro or a Teriyaki Chicken Breast - but not a Santa Maria or a Smokey Garlic Chicken Breast. In other words, the pre-marinated and pre-seasoned grill packs are limited to the variety of marinade or seasoning Fresh & Easy decides to offer in them.

Conversely, we call the Raley's ready-to-grill fresh meat merchandising approach full mass- customization. It's mix & match. Rather than offering a selection of set, pre-packaged pre-marinated and seasoned meat, poultry and seafood items (the grill packs), the retailer instead offers a choice of 24 marinades and rubs in bulk form. Customers can choose whatever variety of marinade or seasoning rub out of the 24 options - or even choose multiple marinades and rubs on the same meat item if they like - they desire for their meat, poultry or seafood purchases.

The key difference with the Raley's approach is that it offers additional choice, hence the full mass-customization definition.

Using our above example, a shopper can get his or her Tri-Tip or Pork Loin pre-marinaded and ready-to-grill in a choice of 12 marinade varieties, as well as having a choice of 12 seasoning rubs. Of course, the choice is limited to the 24 total.

Raley's value-added fresh meat approach also offers a "high-touch" aspect in the form of a store associate who interacts with shoppers and prepares their meat items at the marinade and seasoning rub station in the meat department.

We aren't suggesting one grocery chains program is superior to the other. That's for shoppers to decide. In fact, each of the grocer's programs fits their respective formats: Fresh & Easy's pre-packaged approach fits with its emphasis on pre-packaging fresh foods category wide - produce, meats and prepared foods - in its stores.

Conversely, Raley's is a superstore operator and offers both pre-packaged and service types of merchandising in its stores, particularly in the fresh, prepared foods category. Raley's also puts more of a premium on service, that "high touch" element mentioned earlier, in its stores than does Tesco's Fresh & Easy Neighborhood Market.

Tesco's Fresh & Easy Neighborhood Market and Raley's don't yet compete.

Raley's stores are located in Northern California's Sacramento region, Northern Central Valley, San Francisco Bay Area and south coast. Fresh & Easy has yet to open any of its 37 confirmed store locations - 19 in the Sacramento-Vacaville area and 18 in the San Francisco Bay Area - in Northern California.

Competitors at present or not, Fresh & Easy and Raley's are taking very different merchandising approaches towards the same objective, which is to add value (the mass-customization approach) to the fresh meat, poultry and seafood products sold in their respective stores, along with tapping into the desire among a high percentage of shoppers for convenience, as a way to differentiate the chains and stores among shoppers and thereby grab more of a share of fresh meat category sales in each of their markets.

Let the "official" grilling season begin.

Friday, May 14, 2010

Fresh & Easy Neighborhood Market Not Yet Accepting WIC Vouchers at South L.A. Store; No Start Date Set

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